FOR IMMEDIATE RELEASE FOR MORE INFORMATION Sun Microsystems, Inc. Austin Wing Mayer (415) 336-6295 SUN MICROSYSTEMS REPORTS REVENUE/NET INCOME GAINS MOUNTAIN VIEW, Calif. - May 1, 1989 - Sun Microsystems, Inc. (SUNW), today reported major year-to-year gains for its third quarter and first nine months of fiscal 1989, ended March 31. Revenues for the third quarter were $497.4 million, a 92 percent increase over the $259.7 million reported in the same period a year ago. Net income for the quarter more than doubled to $31.0 million, or $0.38 per share, from net income of $14.3 million, or $0.19 per share, in the corresponding period a year ago. For the first nine months of fiscal 1989, revenues were $1.334 billion, up 94 percent from the $686.5 million reported in the corresponding period of fiscal 1988. Net income for the nine-month period was $81.1 million, or $1.00 per share, compared with $41.2 million, or $0.56 per share, in the same period a year ago. Scott McNealy, president and CEO of Sun, said that shipment trends for Sun's products remained strong during the third quarter, both in the United States and abroad. "Reflecting this," he said, "third quarter revenues from the Sun-4TM supercomputing workstations, which are based on reduced instruction set computing (RISC) technology, increased fivefold over the same period last year. The Sun386iTM family of workstations accounted for more than 10 percent of Sun's total systems revenues in the third quarter. In fact, in its first 12 months of shipments, this product line contributed more than $100 million in revenues, with particular success in the electronic publishing and finance markets." In mid-April, Sun introduced the most significant new products in its history, incorporating powerful graphics capabilities and many of the ease-of-use features of per- sonal computers. The majority of these new workstations and servers are additions to the SPARCTM family, delivering high performance at low cost. Also launched in April were two new systems based on the Motorola 68030 microprocessor, con- tinuing Sun's commitment to the Sun-3TM family, the industry's most popular workstations and servers. Sun's new performance-oriented products incorporate many new design changes and technologies which encourage efficient, high-volume manufacturing. According to Joseph Graziano, vice president of finance and CFO, "The intent is to ship these new products in large quantities, which could improve our gross margin considerably in coming quarters. "However, new product manufacturing volumes in the fourth quarter may be constrained by the limited availabil- ity of certain new components needed to satisfy anticipated demand," he said. "As a result, revenues in our fourth quarter will come mostly from those Sun products available prior to the April introduction, which currently carry some- what lower profit margins than our newest products. By Sep- tember 1989, we expect the majority of Sun's revenues to be derived from our new products," Graziano said. Commenting further on the role of Sun's new products, McNealy said, "With our broad array of new SPARC-based sys- tems at a variety of price and performance points, as well as the Sun-3 and Sun386i families, Sun should be ideally positioned in coming quarters to benefit from the movement toward high-performance desktop computing." Sun Microsystems, Inc., headquartered in Mountain View, Calif., is one of the world's leading suppliers of network- based distributed computing systems, including professional workstations, servers and UNIX(R) operating system and pro- ductivity software. ### Sun-4, Sun386i, SPARC and Sun-3, are trademarks of Sun Microsystems, Inc. UNIX is a registered trademark of AT&T. All other products or services mentioned in this document are identified by the trademarks or service marks of their respective companies or organizations.